Abstract
The claim that a business firm must maximize profit if it is to survive serves as an informal statement of the common conclusion of a class of theorems characterizing explicit models of economic selection processes. Such models, by making explicit the strong assumptions needed to generate this sort of result, are the basis for a critique of standard economic theory which relies on competitive equilibrium. Models of Schumpeterian competition, emphasizing the centrality of innovation, plainly provide a much better description of the world we live in than do models of static equilibrium.
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Winter, S.G. (2018). Competition and Selection. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_35
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DOI: https://doi.org/10.1057/978-1-349-95189-5_35
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